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KTOS · Analysis updated Nov 10, 2026, 6:00 PM ET
Why is Kratos Defense & Security Solutions, Inc. (KTOS) stock moving?
Kratos reported Q3 2026 revenue of $471.8M and adjusted EPS of $0.24, beating expectations, and raised its 2026 outlook. Q4 sales guidance of $480M-$510M has a midpoint slightly above the $490.6M estimate, though the low end sits below it. Management's 2027 forecast assumes about 1,500 Turbo Jet engine sales, with most deliveries in H2 2027, and it is conditioned on annual defense appropriations after the current continuing resolution. The stock fell from a $43.59 close on Oct 29 to a $33.39 close on Nov 5, with heavy volume of 8.3M and 9.5M shares on Nov 4 and 5, and a $32.50 intraday low. Several analysts then cut price targets: UBS to $46 (Neutral), BTIG to $65 (Buy), Guggenheim to $67 (Buy), and Barclays to $80 (Overweight), while Canaccord kept a $120 Buy target. The reversal since then has been constructive. The stock rebounded to $37.69 on Nov 9 on 6.4M shares and closed at $36.72 on Nov 10 on lower volume of 3.9M. Two new contracts followed: the THAICOM 10 gateway antenna award and a long-term Seagate Space Gateway launch-platform agreement with a 2027 first mission. The main tension is between strong near-term execution and backlog, and a 2027 outlook that depends on budget timing and an H2-weighted ramp.
News behind the analysis
- Barclays Maintains Overweight on Kratos Defense & Security, Lowers Price Target to $80Barclays kept its Overweight rating and cut its price target to $80. The update came on the same day as several other analyst revisions.
- Kratos Defense & Security Solutions Inks Agreement With Seagate Space For Use Of Its Initial Gateway Offshore Launch PlatformKratos signed a long-term agreement with Seagate Space to use its Gateway offshore launch platform, with the first mission scheduled for 2027.
- UBS Maintains Neutral on Kratos Defense & Security, Lowers Price Target to $46UBS kept a Neutral rating and lowered its price target to $46 from $60. This is one of the lowest targets among the recent revisions.
- Guggenheim Maintains Buy Rating on Kratos Defense, Adjusts Price TargetGuggenheim reaffirmed its Buy rating and lowered its price target from $74 to $67.
- Kratos Defense Rises on THAICOM 10 Contract With Recent Earnings in FocusShares rose after the THAICOM 10 contract, with investors also weighing the Q3 beat, a record backlog and higher 2026 revenue guidance.
- Kratos Awarded Contract for THAICOM 10 Gateway Antenna SystemsGulf Space Technology awarded Kratos a contract to provide Q/V/Ka-band gateway antenna systems for the THAICOM 10 satellite.
- BTIG Maintains Buy on Kratos Defense & Security, Lowers Price Target to $65BTIG reaffirmed its Buy rating and cut its price target from $104 to $65.
- Kratos Reports Third Quarter 2026 Financial ResultsKratos reported Q3 2026 revenue of $471.8 million and adjusted EPS of $0.24, which exceeded analyst expectations.
- Kratos Defense Beats Q3 Expectations, Lifts 2026 OutlookKratos beat Q3 expectations and raised its 2026 outlook after reporting results on Nov 5.
- Kratos Defense & Security Sees Q4 Sales $480.000M-$510.000M vs $490.635M EstKratos guided Q4 sales to $480M-$510M, with the midpoint slightly above the $490.6M estimate but the low end below it.
About Kratos Defense & Security Solutions, Inc.
Kratos Defense & Security Solutions is a mid-sized US defense contractor that makes jet-powered drones (including the XQ-58 Valkyrie and target drones), hypersonic test vehicles, rocket and turbojet engines, satellite communications gear, and microwave electronics. What sets it apart is its focus on cheaper, quickly built 'affordable mass' systems instead of a few expensive platforms, which places it between the large defense primes and smaller defense-tech companies.
How it makes money
Most of its revenue comes from US government contracts, especially with the Department of Defense, plus a growing share from allied international customers. It reports two segments: Kratos Government Solutions, by far the larger at roughly 80% of revenue (about $380M of about $459M in Q2 2026), which covers microwave electronics, space and satellite systems, propulsion, hypersonics and defense rocket systems; and Unmanned Systems, which covers target drones and tactical drones. Its 2026 revenue guidance was raised to roughly $1.75–1.81B, and backlog was about $2.1B in mid-2026. Profit margins are thin.
What usually moves KTOS
- US defense budget and Pentagon funding decisions
- Drone, hypersonic and missile program awards
- Production ramp of engines and munitions, including supply-chain execution
- Margins, cash flow and share dilution
- Sentiment toward defense-tech stocks, given a high valuation multiple